Published on October 11th, 2018 | by Tina Casey0
Level10 Energy Cranks Clean Power PPA Market Up To 11 (CleanTechnica Interview)
October 11th, 2018 by Tina Casey
Huge corporations like Facebook, AT&T, and Walmart have been ramping up their clean power buys to record levels, but what about smaller companies? Smaller companies want clean power, too, but they don’t need it on the scale of 100 megawatt wind farms or solar installations, and they often lack the resources to consider complex transactions like power purchase agreements.
That’s where the startup Level10 Energy comes in. Last January Level10 launched an aggregation service that streamlines the PPA process for smaller companies, and they’re on track to pump up the volume in the small-scale side of the US renewable energy buyers’ market.
A Clean Power PPA In Every Pot
CleanTechnica got a chance to speak with Level10’s VP of Marketing Ryan Luckin and VP of Developer Relations Rob Collier about the company’s second quarterly buyers’ report, the Q3 2018 PPA Pricing Index.
The new report includes national and regional wind and solar PPA pricing* averages, and it compares changes between Q2 and Q3 2018 in addition to other details.
Without giving too much away, let’s just say that the report supports an optimistic outlook for leveraging more small-to-midsized companies into the PPA market.
If Level10 is new to you, join the club. It sailed under the CleanTechnica radar last year, when it nailed down a slot in the Techstars Seattle accelerator. Billed as “the Pacific Northwest’s most selective startup accelerator,” Techstars is under the wing of Managing Director Chris Devore (this guy).
Level10 covers a PPA marketplace of more than 1200 projects (757 solar and 301 wind) involving 150 developers and almost 110 gigawatts in capacity.
The company launched with a model for working with developers to “blend” resources from wind and solar farms into portfolios that can be tailored to the appropriate size for individual customers.
Last January it introduced a service on the buyer side, designed to help smaller-sized companies jump into the clean power market.
Here’s the money quote from the website (break added):
By aggregating both buyers and sellers, our technology-enabled marketplace offers smaller C&I [commercial and industrial] customers access to the same projects and terms afforded to the world’s largest energy buyers.
With access to a portfolio of the market’s best projects, C&I customers can painlessly meet sustainability objectives and stabilize energy costs, making cumbersome RFP [request for proposals] processes a thing of the past.
Pushing Clean Power PPAs To The Next Level
So far so good, right? On to the interview (comments edited for clarity and flow).
CleanTechnica: Can you talk about the outlook for renewable energy demand in the context of recent and upcoming tax and tariff challenges for renewable energy?
Rob: Ignore some of the noise and look at this at a higher level. We’re looking at the continued downward price of renewables, and that’s continued good news for buyers.
CleanTechnica: Who are your buyers?
Ryan: Level10 just launched the buyer side last January. The purpose was to bring transparency to the market. We knew there was demand when the Fortune 1000 came out with sustainability goals. They wanted to meet those goals with renewables.
There are huge numbers of projects with 100 megawatts but not that many buyers can handle the whole thing.
If we get multiple buyers through aggregation, we maximize value while minimizing risks.
The appetite for this model is huge. For many companies, they only need, say, 20 MW. The idea of taking 100 MW is not real for them.
The industry is on pace to double what it did in 2017. Aside from the velocity of the deals, the number of new companies in the market is increasing.
Ryan: We saw that we were uniquely positioned with real time PPA prices. Wholesale prices are out there but you never had a good sense of them. We wanted to put the prices out there because more transparency is better for everybody.
This is only the second quarter we’ve issued [a report on the buyer side]. Imagining a year from now, when we’ll have four quarters of data.
CleanTechnica: How do you anticipate buyers will react?
Rob: On the developer side, we issue something that mirrors this report. It’s individually tailored to developers in our marketplace. These developer reports are meant to be actionable. They can help developers go back and do value engineering — tighten the screws, so to speak.
Our reports for developers have been really well received. The question was, what if we provide this data publicly? It was kind of a no-brainer.
Ryan: It’s comparison shopping as much as it is validating some of the theses buyers may have. If they’re all the way down the line on a PPA transaction they may need that one piece of validation that says they got a good price.
If they are early in the process they can gain an understanding of the cost. This is huge for 99% of the market.
At the end of the day, sustainability folks are trying to convince their Chief Financial Officers, and more often than not these folks have never done this kind of transaction. They need that advisory and education piece.
Right now going from zero to a final PPA transaction usually takes about a year. There’s a ton of opportunity to make that process more efficient. Some is education, and some is providing aggregation opportunities…aggregation is going to unlock more participation in the market.
*Offered prices, not final transactional prices.
About Those Sustainability Officers…
If you caught that thing about sustainability folk, here’s where things get interesting. Smaller companies can’t afford full time sustainability officers in-house, and even larger companies tend to staff their sustainability team on a shoestring.
So, anything that can take some of the guesswork out of PPA transactions is a plus.
Meanwhile, there really is good reason to be optimistic that the clean power transition will accelerate in the US.
The private sector stepped up and advocated vigorously for former President Obama’s Clean Power Plan when it was first proposed back in 2015. Large and small US corporations are continuing to carry the torch for renewable energy even without support from the current administration, and top investors like Capital Dynamics are also on board.
Speaking of Capital, with its most recent solar acquisition in the US, Capital now has about 2.3 gigawatts in solar projects under its belt. Its portfolio include five of the 15 largest solar farms in the US and its overall clean power infrastructure strategy is closing in on $5 billion.
On the coal side, the hits keep coming. The promise of a surge in coal jobs has turned into a trickle, and another coal power plant has just announced it will close earlier than originally planned. This is a big one, American Electric Power’s 60-year-old Conesville Power Plant in Ohio.
The news follows on the heels of an October 9 bankruptcy filing by the plant’s supplier, Westmoreland Coal.
As described by our friends over at Power Magazine, the Westmoreland bankruptcy marks another milestone in the decline of the US coal industry. As the country’s oldest independent coal company, Westmoreland launched 164 years ago.
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Image (screenshot): via Level10 Energy.